Americans collectively spend an estimated $1900 billion on food each year with the average adult spending $600 per month. Wow! While our wealth and incomes allow us to spend extraordinary amounts on food each year, more than 22 million households (close to 50 million Americans) receive public food assistance from the federal government via the Supplemental Nutrition Assistance Program (SNAP - a.k.a. food stamps).
Per the Food and Nutrition Service of the USDA, this is an increase of 171% in number of recipients since 2008 and 282% from 2000. Monetarily, the cost of SNAP has increased 459% ($61 billion) since 2000 to a total cost of $78 billion in 2012. In addition to SNAP, other public food assistance programs including WIC and Child Nutrition Programs bring the total federal public food assistance to $108 billion in 2012.
For a cost of $600 million per day, ($2 a day per person), every man, woman, and child could be fed in America. Projected over 1 year this would amount to $220 billion. The federal government currently spends $108 billion in food assistance. The $108 billion in public expenditures comprises 2.9% of all federal government spending (4.7% of revenue) and 7.8% of total welfare spending. As public food assistance is not a major contributor to the welfare state or deficit spending, I am more interested in revamping food assistance on principle rather than for purely monetary purposes .
References -
SNAP statistics: USDA Food and Nutrition Services
Government spending statistics: US Government Spending
As covered in Food Assistance Part I (please read to have a general idea of my plan), I believe:
(1) It is the role of the federal government to ensure each citizen's basic needs (including food) are met.
(2) State/local governments and private charities should go above and beyond the proposed system to provide a level of public assistance they prefer.
The primary goal of my proposed public food assistance is to readily, sufficiently, and efficiently provide short-term support to individuals in need to transition into a sustainable living situation.
I believe the primary safety net for individuals should be first themselves, secondarily friends/family, thirdly private charities, fourthly short-term federal/state/local government public assistance, and fifthly being a separate public funded support system to be detailed later.
Currently the majority of public food assistance is provided through SNAP:
- Eligibility requirements (basic):
- Monthly Income: < $1211 + ($429 x household size)
- Resource: Must have less than $2000 in cash
- Maximum monthly dispersed: $200 + (~$150 x household size)
- Recipient is expected to contribute 30% of net income after deductions
- Maximum limit of assistance: No limit
- Maximum length: No limit
- 3 month time limit if unemployed and not meeting work search criteria
- Purchasing restrictions: See Food and Nutrition Service
- Repayment plan: None
- 2012 Participation
- Number of people receiving: 47.6 million
- Cost per year: $78 billion for SNAP ($108 billion with WIC and Child Nutrition Programs)
I propose the following changes designed to transition short and long-term support to friends/family, private charities, and state/local governments . (Please refer to Food Assistance Part I for general information.)
- Eligibility requirements:
- None - Everyone who has not reached their maximum lifetime limit is eligible.
- Maximum monthly dispersed: $120 + ($90 x dependents)
- Maximum lifetime limit: 4 x ($120 + $90 x dependents)
- Designed to cover for 4 months at maximum assistance.
- Maximum length: Unlimited (don’t need with a maximum lifetime limit)
- Purchasing restrictions
- Restrictions are difficult as there is often a way to circumnavigate them. This being said, I think there are two options which may achieve a greater level of success. One is to enact very few restrictions, allowing great freedom with little exceptions other than say alcohol. A second approach would be to have an extremely limited formulary of items available for purchase. So much so stores basically dedicate an isle for those items eligible for purchase. Consistent with my belief freedoms should be exchanged for the security of receiving public assistance, I favor the second option.
- Repayment Plan: Complex
Comparison Chart
SNAP
|
Proposed System
|
|
Income Requirement:
|
< $1211 + $429 x household size
|
None
|
Resource Requirement:
|
< $2000 in cash
|
None
|
Maximum Monthly Aid:
|
$200 + ($150 x household size) – (net income * 30%)
|
$120 + ($90 x dependents)
|
Maximum Benefit Length:
|
None
|
None
|
Maximum Lifetime Aid:
|
None
|
4 x $120 + ($90 x dependents)
|
Repayment Plan:
|
No
|
Yes
|
I believe an effective method of decreasing waste, fraud, and abuse of public assistance programs is to require recipients of aid to pay back into the system after achieving sustainable living conditions. My proposed repayment plan includes the following components:
Total Repayment Amount: Aid received + surcharge of 10-20% (based on time of repayment)
Grace Period: 3 months
- If Joe received $500 in aid he would be required to pay $550-$600 back into the system.
- Total surcharge would be based length of repayment. I propose providing an incentive for those who repay the aid they received quicker.
- Paid in full within 3 months (grace period): 10% surcharge
- Paid in full within 12 months: 15% surcharge
- Paid in full after 12 months: 20% surcharge
- Aid recipients would be extended a 3 months grace period after which wage garnishing would be enacted.
- Using current poverty guidelines, 20% of an individual's wages above the poverty threshold would be garnished until food assistance was repaid in full plus surcharge.
While I have no hesitation acknowledging my proposed changes are not a panacea to the ills of both the lack of care to citizens in need, or the mismanagement of taxpayer funds, I do believe the advantages of enacting the proposed changes outweigh the disadvantages as outlined below:
Advantages:
- Less stringent eligibility and maximum monthly aid received requirements allowing for a greater number of people who need it to receive it.
- Decreased fraud/waste/abuse since outside of using identity theft, people will be required to pay back into system what they took out plus more.
- Disincentives in place to reduce unnecessary utilization.
- Things may get worse before they get better (happens with most change).
- Benefits eventually run out (reason for supporting private charities and a quinary safety net to be detailed later).
- Unsurprisingly since I custom fit the program to my liking I can think of few disadvantages :)
It is my aim to decrease the restrictions and barriers to receiving public assistance while at the same time decreasing the waste, fraud, and abuse associated with our current system. I believe the above listed changes move us in a direction closer to achieving those goals.
Next Post Topic: Book Review II: Economics in One Lesson
$1900 Billion Annual Food Cost Calculation Math
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